Wednesday, 4 April 2018

There
are many people who are totally dependent on their spouse. Disability, health
conditions or simply needing someone to manage the kids – a full-time job in
itself! - can be one of many reasons why some people are totally dependent on
their spouses.

However,
they could be CEOs of their house and therefore one of their duties involves
managing the household budget.

Over
the last few years, rise in inflation rates has not coincided with a rise in
average wage. Also, emergency scenarios may arise, for e.g. your spouse might
lose his or her job or suffer from health issues, which will affect the family
income, whereas the expenditures remain the same.

In such
a scenario, you might have to step up to the plate and help manage the finances
of your family. Wandering how to go about that? Read on to find out more.

How Can You Identify Financial Risks?

It can
become easy to fall under the misconception that nothing wrong will ever happen
to your family.

Risks
are omnipresent and may strike any moment. Financial setbacks can be crippling,
as the process is time-consuming and involves rebuilding your portfolio.
Financial problems can loom unnoticed and if one is unprepared, it could leave
you in danger.

The
main aim of financial planning is to create financial assets through
instruments such as mutual funds, shares, and bank deposits to help you realise
your future goals.

However,
any unwanted event can lead to a loss of such assets or a depletion of a
sizeable chunk from your savings. That is why it is necessary to be aware of
the risks that could hinder your saving exercise.

Risks Involved

The
first step in looking to secure funds involves identifying the events, which
may trigger financial risk. The most common risks a family faces includes
property, personal and liability risks. Let’s get a brief run-down of what
these three risks are and their causes:

Personal Risk: It is a loss of income that is directly
proportional to an increase in expenses. Loss of income may be attributed to
loss of job or a physical disability.

Property Risk: Any damage or loss to one’s living
house or invested real estate property due to fire or theft.

The
motive of identifying financial risks and having a financial plan in place is
to compensate the dependants or insured people monetarily in an unexpected
event such as illness or damage to a property.

One of
the best ways to protect against complete loss of income is having secured
funds in place, because this way your family will be in a better financial
position and well-prepared for a potential loss of income.

Tips to Manage Finances

Money Flow
Management:
Learn how to manage finances, if you didn't know how to before. Analyse
household earning and expenditure. This will help you to understand where you
are spending more and how it can be controlled.

Control Your
Expenditure:
If you have analysed the cash flow then it’s time to control each of those
wherever possible. For example, if your monthly electricity bill is high then
you need to check why, and how it can be controlled. Similarly, a check should
be done on monthly expenses incurred in restaurants, malls, etc. If you are a
shopaholic, look out for discounts and deals. If you are a movie goer, then try
watching it on weekdays as tickets will cost you less as compared to weekends.

Save, Save and
Save: Always
look to save money wherever possible. For instance, if you don’t have a bank
account, look to open a normal savings account. Opening a savings account in a
bank will allow you to enjoy many benefits and provide you with some financial
security as well.

Awareness about
Financial Products: 10 years down the line things will change and expenses will increase.
For e.g. expenses for education, daily necessities etc. will rise with time and
inflation. So think of long term ways to create funds to adjust to these rising
expenditures. For this, you will need to get knowledge of the best available
financial products in the market that will help you meet your financial
objectives. Before investing you should consult a finance expert if possible.

Investing: If you’re saving every
month, then think of how you can grow your money in order to beat the growing
inflation. Never let your money remain idle in your bank account or anywhere
else. Invest in fixed or recurring deposits. Even if your investments grow
slow, it’s good. Something is always better than nothing.

Reclaim For
Mis-Sold PPI:
It is very probable that you or a family member might have been mis-sold a PPI
policy along with a loan/mortgage or credit card. Why? Because millions of
customers were knowingly mis-sold PPI policies in the UK without their
knowledge or consent. Reclaiming for a mis-sold PPI can be a good opportunity
to get a good boost of money. The amount of compensation that you can receive
for a mis-sold PPI can be around £1000 if your claim is successful. If you are
not able to figure out whether or not you have been mis-sold PPI, you can do a
freePPI check and verify this.

Following
the above-mentioned tips will help you protect your wealth and secure your
family’s financial health in the long run!